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2. Respecting the exclusive nature of the brokerage contract

Broadly speaking, the licence holder must use fair competition and customer solicitation practices1.

More specifically, before soliciting a client in order to enter into a brokerage contract to sell, the licence holder must take the necessary steps to ascertain that the property is not already covered by an exclusive brokerage contract2.

The seller’s broker must also verify whether the prospective buyer has already mandated another licence holder to represent him. For example, when a buyer shows up by himself to visit an immovable, the seller’s broker must ask him if he is represented by a broker. Is the buyer is not represented, the seller’s broker must inform him that he cannot represent him nor protect, promote and defend his interests. He must let him know that he represents the seller’s interests and that all he can do is provide fair treatment to the buyer. He must recommend that the prospective buyer get representation from another broker by entering into a brokerage contract to purchase.

The licence holder must not perform any act that is incompatible with an exclusive brokerage contract made with another licence holder. This includes:

  • making an appointment;
  • presenting a transaction proposal; or
  • conducting negotiations in relation to a proposed transaction otherwise than through the licence holder entrusted with an exclusive brokerage contract, unless authorized to do so by that licence holder3.

A licence holder may not send a targeted solicitation letter to a seller a few days before the expiry of an exclusive brokerage contract, nor can he, in an effort to solicit a client who has recently signed an exclusive brokerage contract, advise the client to exercise his right to terminate the contract within three days of receiving a duplicate signed by both parties in order to persuade this client to enter into a contract with himself instead.

The licence holder may, however, engage in general solicitation so long as it is not directly or specifically aimed at persons or partnerships already bound by an exclusive brokerage contract with another licence holder. Such solicitation, for example, could target all persons or partnerships who own property in a particular geographic area or who are members of a particular profession, club or organization4.

Last updated on: September 20, 2022
Numéro d'article: 253765